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Amazon CEO Jeff Bezos built one of the pioneering Internet companies by disrupting the traditional retail industry. (GeekWire File Photo.)
Amazon CEO Jeff Bezos (GeekWire File Photo)

Amazon’s stock is back on the climb after the company posted a surprise profit for the second quarter in a row.

For Q3 2015, the company reported revenues of $25.4 billion, up 23 percent from this time last year. Profits were $79 million, which is down from the $92 million the company showed last quarter. But for Amazon — anything out of the red is welcome news.

The company beat analyst expectations on both the top and bottom line, sending the stock up more than 10 percent in after hours trading immediately following the release.

On a call with investors after the release, Amazon CFO Brian Olsavsky laid out a reinvestment strategy we’ve all been hearing for years. The e-commerce giant has become famous for its scattershot profits as it continues to pump revenue back into the business. Olsavsky said that can sometimes make things look a little “lumpy,” but Amazon is also working to cut cost and show strong numbers at the same time.

“The good thing about 30 percent revenue growth is it gives you a lot more costs to work on as well,” he said. “I would say it’s not as much of a pendulum as maybe as been portrayed. It’s more of a constant. The investment at times ebbs and flows, but the cost reductions will be a constant presence.”

[Related: Amazon Web Services generated $2 billion last quarter, up 78% from a year ago]

Analysts surveyed by Thomson Reuters had expected the company to show a loss of 12 cents per share on revenues of $24.9 billion. At this time last year, Amazon showed $20.6 billion in revenue.

The results represent just the third time in as many years that the company has reported back-to-back profitable quarters. If it can do it one more time in Q4, it will be Amazon’s longest streak since it began dipping in and out of the red in 2012.

Amazon came through with a surprise profit last quarter, sending the stock up 17 percent immediately following the release. The markets won’t reopen until tomorrow morning, but investors already seem to equally enthusiastic this time around.

One area we didn’t get to hear much more about was Prime Day, the sales holiday Amazon invented earlier this year and has been championing as a success ever since.

The company didn’t break out Prime Day specifics, but it did report that it accounted for an estimated 2 percent of the worldwide revenue growth this quarter. And that doesn’t take into account everyone who signed up for Amazon’s $99-per-year Prime membership because of the event.

“So all and all a great day for Amazon, our sellers and our customers,” Brian Olsavsky, Amazon’s chief financial officer, told reporters on a call shortly after the report was released. “We will continue it in future years to make it bigger and better.”

Amazon also reported Thursday that it added 39,300 employees during its most recent quarter, which is record quarterly growth for the company. Amazon’s headcount also surpassed 200,000 for the first time and is now at 222,400 — that’s up 49 percent from this time last year.

Here’s Amazon news release:

SEATTLE–(BUSINESS WIRE)–Oct. 22, 2015– Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its third quarter ended September 30, 2015.

Operating cash flow increased 72% to $9.8 billion for the trailing twelve months, compared with $5.7 billion for the trailing twelve months ended September 30, 2014. Free cash flow increased to $5.4 billion for the trailing twelve months, compared with $1.1 billion for the trailing twelve months ended September 30, 2014. Additional measures of free cash flow can be found in the “Supplemental Financial Information and Business Metrics.”

Common shares outstanding plus shares underlying stock-based awards totaled 489 million on September 30, 2015, compared with 481 million one year ago.

Net sales increased 23% to $25.4 billion in the third quarter, compared with $20.6 billion in third quarter 2014. Excluding the $1.3 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 30% compared to third quarter 2014.

Operating income was $406 million in the third quarter, compared with operating loss of $544 million in third quarter 2014.

Net income was $79 million in the third quarter, or $0.17 per diluted share, compared with net loss of $437 million, or $0.95 per diluted share, in third quarter 2014.

“For the first time, we’re recommending you bring home a six-pack for the whole family,” said Jeff Bezos, founder and CEO of Amazon.com. “At a price of $50 for one or $250 for a six-pack, Fire sets a new bar for what customers should expect from a low-cost tablet. This is one more step in our mission to bring customers premium products at non-premium prices. Fire is the #1 best-selling product on Amazon.com since launch, and based on the strength of the customer response, we are building millions more than we’d already planned.”

 

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